Government delivering big push for small business

“Budget 2003 reflects the continuing high priority the government assigns to fostering small and medium sized business,” Finance and Revenue Minister Michael Cullen and Small Business Minister Paul Swain said today.

“Enterprises employing fewer than 20 people are vital to the health of the New Zealand economy: making up 97 per cent of all companies, employing 43 per cent of all workers, and producing 39 per cent of all good and services,” the Ministers said.

“The budget recognises both the contribution and the potential of the Small and Medium Enterprise [SME] sector by allocating an additional $1.84 million in new funding for the 2003-04 year and $960,000 a year in subsequent years.”

The money will be used for several initiatives including:

An SME Summit to be held in February 2004. The summit will be an opportunity for government to outline the initiatives it is taking to assist small and medium businesses and will highlight achievements and innovation in the SME sector. The establishment of a Small Business Advisory Group comprising six to eight members drawn from the SME sector. The group will provide ongoing advice to ministers on issues affecting SMEs and advise the new SME directorate that has been set up at the Ministry of Economic Development.

“In the tax area, the government will put out a discussion document in August on how to ease some of the burden small businesses face when they become employers by increasing the role of payroll agents in the PAYE system.

“Options to reduce the number of tax payments small businesses have to make by combining provisional tax and GST payments will also be explored as will measures to simplify the Fringe Benefit Tax multi-rate calculations and other potential reforms arising out of the FBT review. “We are also looking at an option to reduce the common problem of new businesses getting into financial difficulties in their second and third year of trading when tax payments for the first two years of business start falling due,” the Ministers said.

Other on-going work in the SME area includes:

A progress report, due before the end of next month, on the implementation of the recommendations of the Ministerial Panel on Business Compliance Costs recommendations. The development by the Department of Labour of best practice employment information, directed at the needs of SMEs. The introduction of a training and accreditation scheme for councillors and commissioners involved in Resource Management Act decision-making. A web-based one-stop-shop for business, to be launched later this month, containing all relevant government information and services.

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